The US SEC issues CFR 17 Parts 270 and 274, a (very lengthy…) proposed set of rules to amend the governance of Money Market Funds (MMF) and increase their resilience in times of stress.

In particular, the proposed rule would remove the liquidity fee and redemption gate provisions contained in the existing rule. The idea being to eliminate incentives to implement and activate preemptive redemptions in a liquidity stress test event.

Instead it proposes higher liquidity requirements on holding of daily or weekly liquid assets, the use of liquidity buffers, swing pricing policies and procedures for institutional investors to bear the (liquidity) costs of the decisions to redeem early.


The SEC proposed rule can be found here: